CBS Could Switch to Cable If Aereo Wins Case, CEO says

The CBS (CBS) television network could go off the air and become a cable channel if courts don’t stop the Internet startup Aereo Inc. from retransmitting shows such as “NCIS” without permission.

“We’ve spoken to cable operators in New York. We can do it in a few days,” Leslie Moonves, chief executive officer of the network’s parent CBS Corp. (CBS), said yesterday at the Milken Institute Global Conference in Beverly Hills, California.

The comments from Moonves follow a similar threat last month from News Corp. (NWSA), parent of the Fox broadcast network. Fox and its affiliate stations would stop broadcasting and serve only pay-TV customers to protect the billions of dollars spent annually on programs, along with advertising revenue and hard-won fees from pay-TV systems, Chief Operating Officer Chase Carey told a convention of TV executives in Las Vegas.

The broadcasters are reacting to a U.S. appeals court ruling on April 1 in New York that allowed Aereo, backed by billionaire Barry Diller, to keep operating. The networks sued Aereo in March 2012, claiming it infringed copyrights by capturing their over-the-air signals with tiny antennas and delivering shows to subscribers on computers and smartphones.

“It’s illegal,” Moonves said, reiterating comments he made last month. “They’re taking our signal and charging people for it.”

Discussing the “upfronts” sales season for television advertising that starts this month, Moonves said he expected ad rates and volume to increase this year.

“The market is very healthy,” Moonves said. “We’re going to do very well.”

Free TV?

Moonves also predicted broadcasters would remove free content from the Hulu.com website and that the business would eventually become an all-pay subscription service similar to Netflix Inc. (NFLX)

CBS, the most-watched TV network, isn’t interest in buying Hulu, Moonves said. Owners of the online video service, including Walt Disney Co., News Corp. and Comcast Corp., are evaluating their options for Hulu, people with knowledge of the situation said in March.

CBS, based in New York, fell 1.1 percent to $45.78 at the close of trading yesterday. The shares have gained 20 percent this year compared with the 12 percent increase in the Standard & Poor’s 500 Index.